Monday, 13 March 2017

Consumers and the Internet of Things: one connection too many?

Liz Coll, Head of Digital
Advocacy at Consumers International, takes a look at recent trends in the global uptake of connected devices and considers what these trends can tell us about consumer attitudes towards the Internet of Things.

New reports in 2017 have not been
quite so bold with their predictions. According to analyst firm Gartner, the total number of IoT devices
deployed by 2020 is more likely to be just over 20 billion. As with any
forecast about the future of the digital economy, there are no certainties –
but this drop feels significant. Could it be that consumer attitudes and
concerns about connected devices are, at least partly, behind these more
reserved predictions in 2017?

Our 2016 report suggested that
security concerns and the invasive nature of connected technology would
potentially hold back consumer engagement in this next deeper, more personal
phase of digital technology. The focus of our work with G20 governments to
help ‘Build a Digital World Consumers can Trust’ makes the case that unless
consumers can trust digital technology, they won’t readily accept it into their
everyday lives. Getting trust right is therefore a key part of creating a
vibrant demand side for the market.

So does it look like
this is the case for the consumer market for IoT devices? A report released by Deloitte in 2016 points to an uneven uptake of consumer IoT
devices in more developed economies. Connected entertainment devices such as
games consoles and smart TVs have maintained a steady growth but sales of
Fitbit devices failed to meet expectations.

Some research indicates that this limited take off is because of a
failure to meet people’s needs, both in terms of pricing and also the
difficulty of use and maintenance. As shown in the MEF
Global Consumer Survey from April 2016, the levels of privacy and security were also problematic
for consumers, with 62% and 52% of those surveyed reporting these as the
biggest concerns, respectively.

Another example of the noticeable consumer resistance to connected
devices has been the move by some Fitbit users to turn off
the smart elements of their devices off only months after purchasing the products. With
novelty seemingly wearing off so quickly, does this mean that penetration of IoT
devices won’t happen as all those excited articles predicted?

In reality, it is hard to prove
or predict that people won’t buy internet of things products because of a lack
of trust. As privacy and technology expert Gilad Rosner somewhat ominously predicted that business momentum will mean
that “The Internet of Things will happily march along with lousy privacy and
security, and we will be the poorer for it”.

Connected technology seems to be
one of those things that creeps into products – an alarm clock on a smart phone
that suddenly wants to become a ‘sleep tool’ to help you enjoy a restful night.
An insurance provider that offers a subsidised fitness
trackers, for as long as you keep active.

But with high profile internet of
things problems such as the #Toyfail and the development of devices such as fertility
trackers collecting and analysing sensitive information about one of the most private
aspects of people’s lives, perhaps people will start to demand technology that
is not just helpful but safe, ethical and human-centered.

How can consumer organisations
play a leading role by working with businesses to ensure that connected devices
can be safer, less invasive and prioritise consumer interests? Our member
Consumer Reports’ new digital standard initiative is an excellent example of how
the global consumer movement can evaluate and test the safety of digital
products and services, empowering consumers to make informed choices about
whether they want to invest in IoT devices. This week, Maria Rerecich of
Consumer Reports will speak at an SXSW event
that considers how a consumer organisation can include privacy, security, and
data practices in its testing protocols.

As consumer
organisations continue to monitor ongoing developments in the connected world,
it’s vital that the global consumer movement advocates for businesses to build security and privacy
in at the design stage. It’s not just the right thing to do but could be a
smart business move as consumers look for products they’re sure they can trust – for your child’s next birthday would you buy
a smart toy classed as ‘espionage equipment’?

We are co-hosting the
G20 Consumer Summit in Berlin on WCRD
this week which will provide an excellent opportunity to engage in a dialogue
with governments, business leaders and key stakeholders about the most pressing
concerns that consumers face and how to work together to create a better
digital world.